Taxing Text Messages?

Makarand writes "SMS is a very popular way of communication in the Phillipines with an estimated 14 million phone subscribers sending an average of 10 text messages a day. However, that may all change if a proposal from the IMF to impose a tax on SMS is implemented to solve the country's fiscal problems according to an article in The Straits Times. The IMF is basing its suggestion on the fact that the country's tax base currently rests on the troubled sectors of the economy- banking and manufacturing, which cannot be squeezed anymore. Hopefully, our political think tanks will not get any such ideas."

Comments

What's the problem?

[neksys]

14 million subscribers sending 10 messages a day is 140 million messages. If the tax worked out to 1/10th of a cent on each message, the total cost to the user would be 1 penny each day - certainly not an unmanagable amount. That works out to $140,000 a day - or $51.1 million a year. That's a sizeable amount of cash. This is one of those cases where the effect to the consumer is nearly nil, but the economic benefits to the country are quite large. We should be congratulating the Phillipines for finding a new and unique way to find money in an economically unstable region, rather than criticize. It certainly beats putting huge amounts of tax on addictive or necessary products such as cigarettes and gasoline like we do here in North America, which I've always thought of as really sneaky and low.

Re:What's the problem?

[Izeickl]

Heh yep, not trolling, but if you had the same amount of tax on fuel etc in the states as there is in the UK you would all soon quickly get rid of your gas guzzlers. UK pays about 75.7 pence per litre, while US pays 25.8 if my source is accurate : http://www.see-search.com/business/fuelandpetrolpr iceseurope.htm

Re:What's the problem?

[btellier]

or $51.1 million a year. That's a sizeable amount of cash

You and I would love to have $51.1 million dollars. However, I'll quote the following from NY Newsday:

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With the decision announced yesterday, up to six anti-missile interceptors will be installed at Fort Greely and four more at Vandenberg Air Force Base in California by the end of 2004. As many as 10 more interceptors will be added to the Alaska site by the end of 2005. They are designed for use against long-range missiles. In addition, between 10 and 20 sea-based interceptors for use against short- and medium-range missiles will be deployed on three U.S. Navy Aegis vessels by 2005.

Kadish said that the deployment would cost $17.5 billion over the next two years, but that $16 billion had already been budgeted to fund the testing program. Critics say the cost of the program could eventually soar into the hundreds of billions.

----

OK, now we're talking about $17.5 billion dollars for 30-40 (35) missiles to be deployed. DEPLOYED, not R&D. We're talking $25 million per missile here. So they could deploy one missile per year, every year, for 18 years in order to stop 2/3's of the missiles that some country might launch against them. Yay!

Re:SMS pricing

[BalkanBoy]

Or better yet, package it az VZW does in the United States - 3.99 for 200 incoming/outgoing messages. When was the last time you sent out 200 messages a month that you _really_ needed to send out and not bullshit with your spouse/friends over SMS?

Besides, in some countries, receiving SMS is free, and the only one who gets charged is the sender.

what about..

[nick-less]

... charging a tax of 2 cent for every spam mail sent

Re:what about..

[ottffssent]

Two cents, one for the government, one for the recipient. I get about 7,500-10,000 spams a year; at 1 cent per, that would buy me a new CPU every year. Which I could definately appreciate, as this $50-three-years-ago-Duron is starting to feel a bit threadbare.

The IMF is a Scam

[hanwen]

I recently read an article on the IMF.

The IMF is a vehicle for implementing a policy that is designed to make poor nations poorer, and the US based financial world richer.

The IMF has a standard approach of privatization, deregularization, more taxes and less government spending. In practice, state assets are sold off to foreign investors, and capitals markets are deregulated to open the gates for speculation. At some point the price of basic living (cooking, heating, taxes) is raised, causing massive civil unrest, and collapse of the economy. In the ensuing turmoil, foreign corporations can buy the remaining assets of a country at garage-sale prices.

Don't take my word for it. Read about Joseph Stiglitz (Nobel laureate, former IMF economist and former director of the worldbank)

• salon
• The Observer
• The new republic online.

Or name a country where IMF intervention did work: (it failed in Indonesia, Thailand, Russia, Brazil and Argentina)

Re:Tax on the stupid?

[doofusclam]

It may be stupid for you to text. given the price, but don't assume we're all stupid because some of us get a good deal.

I'm with O2' web tariff here in the UK, which gives me 50minutes talk time a month to *any* UK landline or mobile, with 600 free texts a month. Bear in mind that unlike in the US caller pays, there are no charging for receiving texts or calls.

This costs me 10UKP a month, about 15USD. Texts are great - I can furtively gossip with my friends and lady while sat at work in front of a suit with a powerpoint presentation, try that with talking. Also it's a non-intrusive technology, unlike a phone ringing which may annoy the recepient at 3am but a text is received and can be read whenever. Plus I could write a book about just why people flirt over sms...

And the composing thing - believe me when in front of that powerpoint presentation I can text with one hand and the t9 predictive text means as long as you choose your words correctly it's as fast as one-handed on a keyboard. Or I can use my palmpilot keyboard to text via IR which appears to onlookers as if im taking notes from the suit...

Don't knock it if you don't know it. And further, it would be easier for governments to increase VAT on text messages instead which would have been even worse as businesses can generally reclaim VAT.

seany

No, it's a hoax

[shoppa]

The "US E-mail tax" is a hoax that's been around for years. See this link for details on the hoax, and in particular these rebuttals:

• Congress to Block Imaginary Internet Tax Bill from the Washington Post
• E-mail Rumor Completely Untrue from the United States Postal Service
• E-mail Tax Hoax from the US Department of Energy's Computer Incident Advisory Capability
• No Consumer Per-Minute Charges to Access ISPs from the Federal Communications Commission

I hate to say this, but the idea of doing this in the Phillipines (especially the imposition by a non-Phillipine organization) makes the the referenced newspaper article sound like a hoax too.

Re:In the US you are taxed for phone text messages

[emir]

there is never guarentee of delivery.... thats how sms works...

here in sweden they did some kind of tests where they sent out something like 10 000 sms messages from different places with each of 3 operators that have gsm networks here. the worst operator (comviq) delivered something like 98% of all sms while the other 2 (telia & vodafone) delived almost 100% of all sms messages.
most sms messages where delivered in something like 15seconds but sometimes it could take up to 2-3 minutes.

I'm an American, but I've spent some time. . .

[kfg]

living in "developing" nations. I've seen this happen. I've come to the conclusion that it might well be better to starve on your own than take the "help" the IMF offers. Of course this is rarely an option because the IMF is usually called in by the 'developed' nations who already have the nation in trouble by the economic balls. The money raised isn't used so much to bail out the local economy as it is to bail out American and European companies invested in the troubled nation. Economic investments in 'infrastructure' are usually even made in such a way as to make sure all the jobs and money go to these Americans and Europeans, rather to local businesses and workers, thus actually depressing the local economy even further.

I think most people in 'developed' nations might not realize one other fact that relates to this specific issue. In rich countries it's the more economically 'endowed' and early adopters who are the most likely to have cell phones. They're a nice little toy.Teenage girls use them to keep track of each other while shopping at the mall for clothes they can't fit into their already overstuffed closets.

In poor countries it's the *poor* who are most likely to have cell phones. Your house may not have electricity. Hell, you may not even have a *house,* but you can at least scrape up enough money to have a phone so if a job offer comes in you can get it, and steal recharges from whatever source you can manage. Rich people have homes and land lines.

The *banks and businesses* are too poor to pay up enough to stay solvent (or are just plain not paying up). The solution is to squeeze pennies from the poor and unemployed.

Ummmmmmmmmmmmm, right.

KFG

SMS pricing

[Anonymous Coward]

Some random comments and trivia knowledge. And a small suggestion to open source communities..

Philippines have been most active SMS users mostly because there the SMS is free (is in major cases and was in all cases) according to my knowledge.

Elsewhere I wouldn't blame goverments on imposing quite normal VAT on SMS, when for operators e.g. in Europe price of SMS/bits transferred vs. price of phone call/bits transferred is still around 1000 (some time ago I remember some calculation in Mobile Pricing Conference in Barcelona where the SMS was calculated to be 950 more cheaper, when only airtime cost is calculated). So SMS is really a money cow.

But things are even more sweet especially here in Finland when we talk about Value added SMS (premium SMS) where some poor application provider tries to catch some value for content and for this price premium operator takes nearly always more than half (e.g. normal SMS price is at cheapest 0,07 euro and VA SMS can cost for customer for example 0,5 euro where content provider gets around 0,2 euro and operator charges around 0,2 euro just for pricing!!), and that is something I call beeing cheap bastard. Especially when European operators are all the time wondering what happend to their long awaited revenues for value added services.

Well tomorrow might be brighter, when new version of SMS, MMS and EMS are coming. And at the same time there comes new Symbian or some other OS based phones that allow application developers to tailor the phone qualities more. Operators MMS pricing follows pretty much the same pricing as SMS. But now the backend server side and phone side (client) are more open and basically it is possible to make an almost combatible MMS client-server application that is operator independent, runs over GPRS and kills not only operators greedy MMS value chain, but also their existing SMS value chain!
- please somebody do it for me, when I am lazy and bit handicapped when it comes to programming.